Chemical Footprint Project Releases First Report
By JJ Jahania
Last week, the Chemical Footprint Project (CFP) published its introductory annual report on corporate progress toward reducing chemical footprints. This report is the first of its kind to shed light on the chemical management practices of some of the world's largest and most recognizable brands.
The CFP initiative was launched in 2014 with the support of investors representing over $2.3 trillion in investment dollars. Its aim is to encourage global businesses to use cleaner chemical alternatives and to be transparent about the way they manage chemicals overall.
One of the tools offered by the project is a set of simple yet insightful metrics that allow outsiders to gain a better understanding of how companies manage the chemicals they use. These metrics assist sustainably minded investors and consumers in analyzing how companies control chemical risks.
The CFP's report uses a 20-question survey to gauge how companies perform in the field of chemical management. These questions fall into four different categories, and are designed to assess different aspects of chemical management: Management Strategy, Chemical Inventory, Footprint Measurement, and Disclosure & Verification. This first year report highlights five key findings:
- Of the companies surveyed, nearly 30% have board-level oversight or incentives for senior management, and these firms performed at a higher level than companies without such systems. This finding clearly illustrates the importance of strong executive leadership.
- Most companies have chemical management practices but they don't disclose them. In fact, 83% of companies have a legally restricted substances list, but only about a fifth of those with a list actually publish it. One goal of the CFP is to persuade the corporations that have such policies to disclose them to the public. The CFP is not pressuring companies to change their chemical management procedures in any way; instead, companies are encouraged to publicize practices that they already follow.
- Many companies are taking on unnecessary chemical risks by focusing only on managing chemicals that are directly related to final products. Another goal of the CFP is to encourage companies to broaden their perspectives and pay attention to chemical hazards associated with manufacturing, packaging, and supply chains. Comprehensive chemical management practices that cover an entire production cycle are more likely to reduce a company's chemical footprint significantly over time.
- Companies that focus on designing only chemically clean products tend to have better metrics and smaller footprints than the average corporation. This makes sense, as a company that places extra emphasis on minimizing harmful chemicals in all its designs would be expected to perform better than competitors that don't have as much of a commitment to sustainability.
- The transition to a safer chemical future takes time. For a business to make any kind of improvements in its chemical management practices, it has to know what chemicals it is working with in the first place, and it needs to know where to look for hidden problems. Then, once the problems are identified, positive change often requires capital investments and can take a while to show results. Such efforts are generally long-term projects.
The overall purpose of the Carbon Footprint Project is to create an environment in which it is in everyone's best interest for companies to reduce their chemical footprints. Greater transparency in chemical management procedures and a lower carbon footprint can help companies win the favor of its customers and investors. When there is more information available, socially-conscious buyers can make a more informed decision-whether they are purchasing a company's products or its stock. Such efforts also demonstrate how public disclosure of chemical processes and chemical risk management can be a competitive advantage.
Support from global brands like Levi Strauss & Co, Seagate Technology, and Johnson & Johnson is helping the CFP build momentum for its chemical safety initiative, and it is expected that other companies will follow suit in the near future.
It remains to be seen what the lasting impact of the CFP and its annual report will be. A large part of its usefulness depends on companies being willing to participate, but with several big names already on board, the CFP is making quick progress. As more and more companies sign on to the survey, those firms that are not participating will be under increasing pressure to do so.
As a signatory of the CFP, First Affirmative is excited to see how this survey reaches its potential to create positive impact. Over the long-term, reducing chemical footprints should become a collective effort driven by corporations all over the world that commit to public disclosure of chemical management practices. They can then be held accountable by investors and customers, which creates further incentive for companies to improve their chemical management even more, as they can impress customers and investors.
First Affirmative understands that the ways we save, spend, and invest can dramatically influence both the fabric and consciousness of society. Are you making conscious decisions about the impact of your consumer purchase and investment decisions?
Posted: June 2, 2016